Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

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INCOME TAXES
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 19 - INCOME TAXES

 

As of December 31, 2022, we estimate we will have net operating loss carryforwards available to offset future federal income tax of approximately $24.4 million. These carryforwards will expire between the years 2028 through 2037. Under the Tax Reform Act of 1986, the amount of and the benefit from net operating losses that can be carried forward may be limited in certain circumstances. Events that may cause changes in our tax carryovers include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. Therefore, the amount available to offset future taxable income may be limited. We carry a deferred tax valuation allowance equal to 100% of total deferred assets. In recording this allowance, we have considered a number of factors, but chiefly, our operating losses from inception. We have concluded that a valuation allowance is required for 100% of the total deferred tax assets as it is more likely than not that the deferred tax assets will not be realized.

 

 

The non-current deferred tax asset is summarized below:

 

    2022     2021  
             
Deferred tax assets                
Net operating loss carry forwards   $ 6,245,000     $ 5,557,000  
Intangible and fixed assets   $ 75,000          
Other     50,000       30,000  
Total deferred tax assets     6,370,000       5,587,000  
                 
Deferred tax liabilities                
Depreciation and amortization     -       (107,000 )
Valuation allowance     (6,370,000 )     (5,480,000 )
Net deferred tax asset   $ -     $ -  

 

The benefit for income taxes differed from the amount computed using the U.S. federal income tax rate of 21% for December 31, 2022 and 2021, as follows:

    2022     2021  
             
Income tax benefit   $ 570,000     $ (69,000 )
Non-deducible items     (18,000 )     (142,000 )
State and other benefits included in valuation     103,000       16,000  
Provision to return adjustments     55,000          
Impairment of intangible assets     82,000          
Exclusion of income (losses) of pass-through entity     55,000       52,000  
Other     43,000       -  
Change in valuation allowance     (890,000 )     143,000  
Income tax benefit   $ -     $ -